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Apple's darker side

A new study from three Chinese campaign groups reveals the hidden face of America’s trendiest technology giant. He Haining and Yuan Duanduan report on Apple’s supply-chain secrets.

On January 20, a report entitled “The other side of Apple” was published in Beijing. Compiled by three civil-society organisations – the Institute of Public and Environmental Affairs (IPE), Friends of Nature and Green Beagle – the research revealed a darker side of the Californian technology giant, flagging up “pollution and poisoning incidents” to “supply chain secrets kept concealed from the public”. Included in the report was a ranking of transparency levels at 29 technology companies: Apple came in last place.

The report lists 10 incidents that, according to the authors, show Apple’s suppliers have violated occupational health commitments, environmental-pollution commitments and promises to ensure workers are treated with respect and enjoy dignity. The suppliers in question are scattered across cities including Suzhou, Guangzhou and Dongguan. And the incidents include: the suicides of 12 employees at a Foxconn factory in Shenzhen, a case of n-hexane poisoning at electrical manufacturer United Win Technology and numerous instances where emissions standards have been exceeded by subsidiaries of glass manufacturer CSG Holding Company.

According to international practice, a green supply chain should promote awareness of environmental protection, operate policies to eliminate waste and pollution, use non-hazardous components and prevent its processes causing harm to others. This approach should run through the entire product supply chain, from the supplier of the raw materials, to the manufacturer and distributor, to the retailer.

Ma Jun, one of the authors of the report and director of the IPE, believes that Apple has violated its own commitments in three respects: environmental protection, occupational health and workers’ rights. At the IPE, Ma Jun runs a pollution database, which collects data on corporate environmental violations across China. In April last year, together with 33 other environmental-protection NGOs, the IPE published its first report on heavy-metal pollution in the IT industry. The report covered Apple, Panasonic, Haier, Nokia and many other well-known brands operating in China.

So far, Ma Jun has received minimal response from Apple to the April publication: “The company has essentially failed to respond to the situation,” he said. “It has been some months since our initial investigation and Apple has remained almost completely silent.”

Poison in Suzhou

Ma Jun’s investigation was triggered by the now infamous n-hexane poisoning incident in Suzhou, a city in east China, in 2009. At the beginning of May that year, several workers from Suzhou United Win Technology (Wintek), a company that supplies touchscreen component parts to technology companies, started experiencing loss of strength in their limbs and “strange pains” in their hands and feet and even fainting in the workshop. One by one, more than 60 workers were admitted to hospital for observation. Subsequent investigations revealed the culprit to be a chemical solvent called n-hexane.

At that time, Wintek was using n-hexane instead of alcohol to clean the touchscreens of mobile phones. N-hexane is a colourless liquid that dries more quickly than alcohol. However, it is also toxic and long-term exposure can cause headaches, dizziness, weakness, numbness of the limbs and other chronic symptoms, such as fainting, loss of consciousness and even death. Wintek has more than 10,000 employees and is the world’s best known manufacturer of LCD mobile-phone screens. According to the Chinese NGOs’ report, it is also one of Apple’s most important suppliers.

When it comes to environmental pollution and occupational health, the IT industry is a crisis zone. Many high-tech components present a serious source of pollution, for example the large number of metal parts in the plating links of printed circuit boards (PCBs), batteries and power plugs. In their new report, the NGOs explain that the major pollutants in the production of printed circuit boards include first-class contaminants such as nickel and chromium. Ma Jun said: “According to our survey, many PCB manufacturers are unable to meet emissions standards.”

In addition to the Wintek case, an instance of n-hexane poisoning was also reported at a company called Win Heng Hardware & Electrical Operations, also in Suzhou. A former employee described the firm’s premises as resembling a small-scale production workshop: “There were more than 30 people in one room, with no windows and only one entrance.” It has since been reported that Win Heng has been closed down by the Ministry of Commerce, but, as its chief executive Zhong Jianyang refuses to be interviewed, it has not been possible to verify the status of the company. According to the worker we spoke to, Win Heng was responsible for producing labels for Apple.

One year on and the fallout from the n-hexane poisoning episode continues, as many employees are still battling for compensation. Twenty-six-year-old Ah Jing was categorised as “Level 10” disabled as a result of the incident. Level 10 warrants compensation of 100,000 yuan (US$15,000), but Ah Jing believes his case should be revised to Level 9, for which the compensation is set at 160,000 yuan (US$24,000). He travelled from Suzhou to Nanjing in order to be re-evaluated. The results are still unknown.

“Many people go to Nanjing for this purpose, but are kept at a Level 10,” said Ah Jing, dispiritedly. He said the symptoms of his condition continue to bother him a great deal: the weather has turned very cold and at night he uses three quilts. His hands and feet turn numb and painful on account of the cold and, when the pain is extreme, he suffers cramps and sweats.

Apple’s secrets

Since starting his investigations, Ma Jun has discovered the full extent of the heavy-metal pollution problem posed by IT firms in China. Many of the companies concerned, including those mentioned above – Panasonic, Haier, Nokia – are in close communications with the IPE and are making extensive changes to their operations. Despite this, Ma Jun and Apple have entered a tug of war and Apple’s only response has been “no response”.

IPE’s findings have been sent to Apple’s headquarters in the United States. But the firm has simply demanded that Ma Jun provide proof that Wintek is one of its suppliers. The California-based company has also said that it is conducting an investigation into the issue, but has been unwilling to provide any details or a timeframe for completion.

According to the NGO report published last week, Wintek was established in 1999 with investment from the Taiwan Sheng Hua Technology Company: “According to numerous public sources, this factory is an important supplier of touchscreens to Apple,” says the report. Ah Jing said that his job in the Wintek workshop was to operate a vacuum assembly machine as part of the touchscreen production line. The screens produced were the same size and style as those in the iPhone4. And the process involved adding in an extra piece of iron into the mobile phone – the solution used to fix the signal problems experienced by the iPhone4.

On January 18, a request from Southern Weekend for information about the relationship with Apple was rejected by an employee in Wintek’s management department, who said: “This is a trade secret, we have already signed confidentiality agreements and we must protect the identity of our clients.” The NGO report also mentions two companies based in Dongguan: Masstop, a Wintek subsidiary, and Shengyi Electronics. Both companies, prominent in their respective fields, have denied that they are Apple suppliers.

A reporter who is carrying out long-term research on Apple and is writing a book about the company’s supply chain, told Southern Weekend: “Apple keeps its suppliers strictly secret. It requires its suppliers to sign confidentiality agreements, which they are not allowed to make public. However, after each of the products becomes available, research organisations tend to publish analyses that carefully detail the manufacturer of each product component and its cost price.”

Southern Weekend has contacted Apple several times but, at the time of going to press, had received no reply.

The research report describes Apple as having a “culture of secrecy”, that begins with its unique operating system (not readily compatible with others) and translates to its supply chain, the structure of which is difficult to understand. Whether or not Apple honours its environmental and social responsibilities can only be inferred from its own company report. Ma Jun said: “It is understandable that the company’s unique technology needs to be kept secret. However, I do not feel it is acceptable to apply the same secrecy to its supply chain. As the pollution it produces harms others, this aspect should not be kept under wraps.”

Apple’s “Supplier Code of Conduct” shows that the company has a detailed system of standards. For example, in its “environmental impacts” section, it has relevant regulations for hazardous substances, solid waste and waste water. The company also identifies abuse of its workers, the provision of false audit material and creation of serious environmental damage as gross misconduct. In 2009, 17 such cases were recorded. Offending organisations are subjected to an observation period of one year and the case is then re-examined after the observation period is complete. The most common violations are imposing excessive working hours, improperly calculating overtime pay, supporting the practice of paying below minimum wage, discriminating against workers, failing to provide job security and causing environmental pollution.

However, while Apple provides information on its regulations, in its 2010 supplier responsibility report, there is still no list providing the names and details of specific suppliers.

Zhao Xu, vice president of the economics department at Shanghai Jiaotong University, said: “As the technological demands of manufacturing Apple’s products are so high, in the early production stages the company often has to deal with inadequate production rates, which affect supply of the goods.” The reporter writing the book about Apple added: “In order to guarantee supply, the companies do not rule out the use of some toxic or even illegal technology. Wintek is a typical example of this.”

In early 2011, Ah Jing and several other workers poisoned by n-hexane wrote a letter to Apple’s chief executive, Steve Jobs, explaining the harm that the incident had inflicted: “We hope that Apple will seriously investigate the violating behaviour of the manufacturers involved and that our fellow victims will come forward to demand compensation,” it said.

Just like Ma Jun, the poisoned workers are still waiting for an answer. (Editor's note: Since this article was published in Southern Weekend, chinadialogue has spoken to Apple’s US headquarters. A company spokesperson said that Apple complies with international best practice on supply-chain transparency and addresses problems with suppliers as they come up. She said she does not expect Apple to respond directly to Ma Jun’s report.)

This article was first publishedby Southern Weekend.He Haining is a reporter at Southern Weekend and Yuan Duanduan an intern. Zhaoyi Dan, also an intern, contributed to this article.

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gaidee
15:0426.01.2011

“苹果”

苹果的手机不完美，苹果公司不完美，所以呢，掉了一块。自然，出了问题需要解决。

好在苹果卖的是真苹果，有些公司说卖的是苹果，也许你拿到的是梨、李什么的。更有甚者，挂羊头卖狗肉，毒也。人心不古，悲也。

"Apple"

Apple's phone isn't perfect, Apple isn't perfect, so forget it. Naturally when there's a problem, you have to solve it.

The good thing is that Apple is selling real Apple products, whereas some companies say they are selling Apple products, but you might be getting counterfeits. Furthermore, the cheat who advertises lamb but sells dog meat poisons his customers. People aren't what they used to be - it's a shame.

henry3dogg
15:1226.01.2011

成熟点 这不是苹果的问题。

苹果并不是中国的国民, 而是个顾客。

最终如果中国人不想苹果去购买比如说富士康的零部件，那麽苹果当该止步离场，转移工作到印度或巴西。

没错，污染问题当需解决。然而这是中国人民和政府的事。他们有需要，有力量和有责任去解决污染问题。 这些是中国的问题。

中国不喜欢其他国家干扰中国内政。这要求并不为过。倘若外国企业开始介入，他们将会有多反感。

称这为商业垄断也不为过。

因此，身体力行，去追究那些产生问题的中国企业，或是你们的政府，还有停止恐吓勒索中国的顾客，允许他们介入。

该长大了!

Grow up. This is not Apple's problem.

Apple is not a citizen of China. It is a customer.

Ultimately if the people of China do not want Apple to buy from, say, Foxconn, then Apple should cut it's losses and move the work to India or Brazil.

Yes, pollution needs to be solved. But it is up to the people of China, and their government to solve it. They have the need, the power, and the responsibility. The se for the other issues. These are Chinese issues.

China does not like it when other governments interfere in internal Chinese affairs. That is not unreasonable. But how much more will they dislike it if foreign companies start to weigh in.

Commercial Imperialism you would call it, and you would be right.

So get off your bottoms and sort out these problems directly with the Chinese companies that are causing the problems, or with your government, and stop trying to blackmail China's customers into getting involved.

It's not as simple as that

There's growing up to be done on both sides.

The international best practice that Apple claims to follow expects companies to be responsible for their supply chains and to behave responsibly towards other stakeholders, including their workers. If Apple is complying with best practice, why is it at the bottom of the list and why is it still not answering the questions that Chinese civil society groups have raised?
If it has nothing to hide, why the secrecy? Can Apple's customers really be sure that their chic and shiny gadgets do not have human suffering built in? Would they feel so good about them if they knew?
The last CEO of a major corporation who said that what happened in his supply chain was not his concern didn't hold on to his job very long -- and that was more than a decade ago...

The world has changed

I fully agree with Yugong. Surely, the days when big corporations could separate themselves from their supply chain are gone - or at least the days when it was considered acceptable to do so. That is why campaigns to ensure decent wages for workers making clothes that end up in big western chains, for example, are largely welcomed by consumers. Or why many people are willing to pay more for a product they know has been "ethically sourced". You say it is up to the government, and not Apple, to solve pollution problems. If everyone takes that attitude, opportunities for the private sector to help resolve global problems will be lost. Corporations like Apple have huge influence. Why shouldn't we ask them to use that to improve the environment, in China or anywhere else?

The world is changing everyday

It is natural that Apple is blamed, for it is big and much profitable. The interest inside is the one to realize the ideal of some NGOs. If it reveals the Apple's scandal very well, makes Apple break down and solve the problem of Apple corporation, then what about our social problems? Then we comes to what should we reveal and to what extent should we do. It is hard because we have no standard to follow, which should be made by the government.
Company has its own interest. In short term Apple's rivals will gain profit, but in long run, these companies are not so warm-hearted.
Some person says, the world has changed, or maybe he means time.
In the narrow circle of environmental protection, there are so many people muddling along.

Vitalka

It's a pity that Apple forget about people. Their customers made them rich, not their technology. The real cost of any iPhone should be three times less than it priced in the store. Many Chinese phones are more smart, more cheap and even better quality...
And it's very bad to know that in ordr to make more sales this famous company hide many accidents and some times even refuse to confirm that it was a true event.
Speaking about supplier secrets - it's a normal position for any big company. But they forget about possibility to identify chips and other details in manufactured phone :-) So, if anybody want to get evidance of some company being Apple supplier - in most cases it's possible to prove.

response to "Grow up, this is not Apple's problem"

Sorry to break it to you, it is Apple's problem. Yes, Chinese government and its people are responsible of the pollution because they allow it to happen, because many are not aware of the situation.

However, Apple as a corporation has to be responsible of its workers regardless of where they come from. Even if Apple is to move to India or Brazil, the same problem will occur if Apple doesn't tighten its policy. If Apple see itself as a guest than it should act like a guest and be respectful of its host. How would you feel if your friend came for a visit, trashed your place, and treated your family members like servants?

To be clear, the other side of Apple is about corporate responsibilities everywhere. It is unfortunately Apple becomes the target, but it is mainly because Apple is not responding to Chinese NGOs' request on cleaning up its supply chain. NGOs in China are also working on educating the publics about heavy metal pollution as result of IT products. We all know that publics, businessmen and governments need to work together.

In the end, as consumer, we are responsible of what happened in China because we drive the market through our demands.